Dear Startups, It’s Freakin’ VUCA Out There!

No, it’s not an Eastern European carmaker. That was Yugo. And yeah, it’s not an Italian restaurant in SOMA either. That’s Buca. I’m not a big fan of either of those, but I am a huge fan of VUCA.

VUCA stands for volatility, uncertainty, complexity and ambiguity. Any startup or anyone going to work at a startup needs to index high on their comfort level with each of these. Trust me: it’s VUCA out there.

Volatility

Change is constant at startups. Everything is new and new information is acquired every day. (You know: build, measure, learn, repeat.) This leads to changing strategies, changing roadmaps and changing roles. Everything is always changing. Everyone in the shifting startup world needs to expect the unexpected, be at the ready for new twists and turns, and not get too rattled when the inevitable curveball comes their way.

You also need to come up with some frameworks for handling the constant change. Back at the startup I co-founded, Dogster, my co-founder, Ted, and I had a term we used called the impact horizon which we used for our product roadmap planning. The impact horizon was the time limit for which a project must have an impact in order for us to consider working on it. In the early days of the company, we wouldn’t start a new project unless we thought it would have an impact within a couple of weeks (thus, impact horizon equalled two weeks at that time). This was because things change so fast and we couldn’t invest in longer projects that might be irrelevant by the time they were completed. As the company matured and became more stable and predictable our impact horizon expanded to 3–4 months. An impact horizon is dependent on the stage of company and the industry, but for consumer startups it usually starts pretty short and gets longer over time. This term and our frequent use of it was helpful as a constant reminder of the ever-changing landscape and put us on the offensive in creating our roadmap.

Remember, don’t just accept and expect change; find ways to plan for it, to walk towards it, and turn it into your opportunity. This is where you can outpace the big entrenched incumbents (those jerks!).

Uncertainty

The biggest uncertainty at a startup is existential. Will the company exist one year from now? Six months from now? Anyone joining an early stage company knows that there’s this kind of risk involved. Most early stage startups in my experience have a runway that measured in months. Most founders and CEOs appropriately buffer their team from the ups and downs of shrinking runway and the unsteady fundraising process. Inevitably, through a culture of transparency or the pervasiveness of the grapevine, the word gets out that the company has four months left of cash and a handful of dubious funding options. This is when the team cannot get spooked and needs to perform. Can you look death in the eye, sip your pamplemousse La Croix calmly, and power through?

Even in companies where fundraising is not an issue, there’s plenty of uncertainty. The primary ways I see uncertainty impact the team are in talent, growth opportunities and, of course, product progress.

There’s almost always a need for more talent on the team and there’s almost always conditional promises for these additions. In Q4, if all goes well, we’ll shift another iOS engineer to your team. But will that actually happen? Should you bank on it? Definitely not. But should you be ready to go if it does happen? Yes!

Similarly, when a company is growing fast career growth opportunities abound. A high-performing product manager who wants to try her hand at managing a team of other product managers will get her chance. A junior marketing manager who wants to take on more responsibility will get a shot. However, in most startups growth is not a foregone conclusion. I’ve had the discussion many times… we hoped we’d be in a position to grow your team and get you some management experience, but unfortunately we are not growing as fast as we had planned. If you are optimizing for your personal career growth opportunities, the startup world is not predictable or linear. That said, there are careers made from battlefield promotions that come out of nowhere. Startups specialize at this.

Finally, when any new business idea, product, or idea is introduced into the world there is going to be uncertainty as to how it will be received. There are steps one can take to de-risk this, but there’s always going to be some element of surprise. I’m guessing you all know this already.

Complexity

Any new product or company worth building these days is going to be complex or else it would have been done already. Not only are business problems themselves complex, but technology stacks seem to get more complex all the time. I mean just consider the device complexity. There are mobile, tablet and desktop devices. On mobile, there’s iOS (iPhones) and Android (nearly everything else). You can build native apps, embedded web or a mobile website. There are different coding languages and frameworks (e.g. SWIFT, Objective C, ReactiveJS for iOS). There are different phone versions with different native capabilities. And, there are a frustrating amount of screen sizes in the wild.

The partner ecosystem is thorny as well. Your cloud services may be with Amazon’s AWS or with Microsoft’s Azure. Your analytics maybe Google Analytics, Amplitude, Leanplum or Mixpanel. Want to manage your push notifications? AppBoy, Kahuna, Urban Airship, anyone? Email? Same deal. Bonus: it gets even more complex in certain domains. My current company, Varo Money, lives in the banking/fintech world. We have many partners to help us navigate the complex financial stack including Bancorp, Galileo, Cloud Lending, Silicon Valley Bank, and Kasisto to name just a few.

Lastly, if you are in banking, insurance, the sharing economy, or many other regulated or legally tricky industries there’s going to be a whole other layer of complexity thrown on top of your operations and product development. In banking or investing, there are strict regulatory rules for everything from app copy to behind-the-scenes documented sign-offs. It was a shock to me when I realized that A/B test variants for a small copy test had to go through multiple approvals. When I was at TaskRabbit, there was legal complexity as well. We worked hard and spent a lot of effort ensuring we were on the right side of employment law as well as liability concerns.

Ambiguity

Here’s the one that trips up a lot of folks new to startups: ambiguity. By definition at a startup you are just starting. So, a lot of stuff that you have in more mature companies has not been baked yet. Moreover, there is an intentional ambiguity to organizational design and processes. This is because adding people, rigid role definition, automation and formalized processes too soon is often worse than waiting until you are feeling the distress and then smartly taking steps. As Airbnb’s Brian Chesky said 0n Reid Hoffman’s new podcast, “do everything by hand until it’s painful.” Pro tip: once it becomes painful, make sure you do something about it.

Sports analogies are boringly overused in tech, but sometimes they just work. I like to think of roles at a startup similar to those on a baseball, soccer or bo-taoshi team. Let’s stick with baseball. You have your position, say shortstop, but once the ball is hit you move where necessary. For example, if the ball is hit to shallow left field, you and the left fielder will run to it. Whoever is in the best position will make the play and call off the other. The player not catching the ball will back the other up. At a startup roles are often a little blurry on the edges–by design. You know where most of your work will be (your position), but many things come up in between. Parties near the problem (or opportunity) need to run to it, see who is in a better position to handle it, and either own it or play a back up, supporting role. If these roles were rigid and something came up that didn’t fit well into the organizational paradigm, there’s going to be thrash. When these in-between things start to become obviously better suited to one role than the other, change the organization design. In the meantime, embrace the ambiguity!

I’m a big fan of sound processes. There’s nothing better than making order out of chaos, or even just making something run a lot smoother. The dark side of process, however, is when the process becomes the thing. You know that meeting you go to every week that just feels like a waste of time? It was probably effective at the beginning and it likely made sense to have it occur weekly back then. But here you are and it’s been months since the meeting felt useful. This is an example of where process–even a simple process like a recurring meeting–can get legs and become the thing. People are going to the meeting because it’s the so-and-so meeting and it’s on the calendar. That’s an oversimplification, but to counter the downside of too much process many startups hold back as long as possible before locking in new processes. Be comfortable with the informal and ad hoc nature as well as the accompanying ambiguity. Focus on getting things done. Add the process when you absolutely have to, when it aches. And, cancel or rethink any stale process, especially meetings.

E Pluribus VUCA

Companies are incredible inventions. Through companies groups of people and resources come together in a way that enables achievements far greater than any individual could achieve. Much of the value in a mature, successful company is captured in finding and operationalizing ways to overcome VUCA. However, startups need to stay dynamic while they’re young. It almost always takes a few fits and spurts to find the mojo. Many never find it. The startups and startup teams that can embrace the VUCA have a better chance. At least that’s true today. It will probably be different in the future. Or not. It’s VUCA.

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Big thanks to Derya Rose and David Clements for feedback on this post! Thanks to Iliana Montauk and Addi Regev for letting me bounce some of these thoughts off you over the past few weeks.